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Lawsuit Against Lotus Development Corp. Alleges Software Bugs

July 30, 1986

BOSTON (AP) _ A Florida construction company claims in a federal lawsuit that a defect in computer software manufactured by Lotus Development Corp. of Cambridge caused it to lose $254,000 by underbidding on a construction project.

But Lotus contended Wednesday the fault lies with the user of the computer program, not with the program itself.

″Lotus is very vigorously contesting the assertion that the program was defective,″ said Lotus attorney Lindsey Kiang.

Kiang said the suit was the first of its type filed against Lotus, the nation’s largest maker of personal-computer software. But he said dozens of similar suits have been filed in the past 20 years against makers of software for mainframe computers.

″Contractually, I think the courts have upheld arrangements where limitation-of-liability provisions were in the (customer) agreements,″ he said.

Such limitations, printed on every box of Lotus software, state that Lotus is not responsible for lost profit from defects in the software, he said.

In its suit filed in October in Fort Lauderdale, Fla., James A. Cummings Inc. said it used Lotus’s popular Symphony program to prepare a bid on an office complex worth more than $3 million, but somehow the program failed to add $254,000 in administrative expenses to the final total, leading to submission of a bid that was too low.

″In preparing the bid we did exactly as the (software) insructions called for. Cummings got the bid - that’s the problem,″ said John Squitero, an attorney for the construction company.

″We just want our money (the $254,000) back,″ he said, adding the company was not seeking any damages from Lotus.

Squitero said he thought the suit, scheduled for trial in February, stood a good chance of success.

″I think anybody that comes out with a product with a defect in the product ... ought to be responsible for the consequences.″

Peter Marx, general counsel for the Information Industries Association, a trade group for computer and software companies, said he believed this was the first suit of its kind. The suits against makers of mainframe-compu ter software involved allegations that the programs didn’t work, not that they produced wrong information, he said.

Marx said he didn’t believe Cummings would win the suit.

″There is a responsibility on the part of people to take a look at the results that they are producing,″ he said.

But he said the litigation could hurt the software industry nonetheless by prodding imitators.

″I think the damage to the industry is the filing of the suit itself because a lot of people don’t understand that it’s everybody’s God-given right to file a lawsuit when they’ve been injured,″ he said. ″Until the thing is finished off, people are in a state of uncertainty.″

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